DMZ v DNA: Permission to Commence Proceedings Against Insolvent Party in Arbitration Dispute
In DMZ v DNA, the Singapore High Court dismissed DMZ's application for permission to commence proceedings against DNA, who is undergoing insolvency proceedings in Hong Kong, concerning an arbitration dispute administered by the SIAC. The court, presided over by Hri Kumar Nair J, held that the intended proceedings were legally unsustainable and an abuse of process, as they sought to challenge a decision by the SIAC Registrar in breach of the SIAC Rules. The underlying dispute arose from sale of oil products and an extension agreement, both containing arbitration clauses.
1. Case Overview
1.1 Court
General Division of the High Court of the Republic of Singapore1.2 Outcome
Application Dismissed
1.3 Case Type
Arbitration
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Singapore High Court decision on whether to allow DMZ to commence proceedings against DNA, an insolvent party, in an arbitration dispute.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| DMZ | Claimant | Corporation | Application Dismissed | Lost | Lin Chunlong, Zerlina Yee Zi Ling, Li Zizheng, Koh Swee Yen |
| DNA | Defendant | Corporation | Application Dismissed | Won | Ting Yong Hong, Chua Beng Chye, Wu Junneng, Alicia Tan, Lin Yong’en Nathanael, Li Wanchun |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Hri Kumar Nair | Judge of the High Court | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Lin Chunlong | WongPartnership LLP |
| Zerlina Yee Zi Ling | WongPartnership LLP |
| Li Zizheng | WongPartnership LLP |
| Koh Swee Yen | WongPartnership LLP |
| Ting Yong Hong | Rajah & Tann Singapore LLP |
| Chua Beng Chye | Rajah & Tann Singapore LLP |
| Wu Junneng | Rajah & Tann Singapore LLP |
| Alicia Tan | Rajah & Tann Singapore LLP |
| Lin Yong’en Nathanael | Rajah & Tann Singapore LLP |
| Li Wanchun | Rajah & Tann Singapore LLP |
4. Facts
- DMZ and DNA entered into four sale contracts for oil products between 2017 and 2018.
- The sale contracts contained materially identical arbitration clauses governed by Singapore law.
- An extension agreement was entered on 25 December 2017, also containing an arbitration clause.
- Disputes arose, and DNA filed a Notice of Arbitration with the SIAC on 24 June 2024.
- The SIAC initially deemed the arbitrations to have commenced on 3 July 2024.
- DNA requested the Registrar to correct the commencement date to 24 June 2024.
- The Registrar revised the commencement date to 24 June 2024.
- DMZ filed OA 1050 seeking a declaration that the commencement date was 3 July 2024 and challenging the Registrar's decision.
- DNA is subject to insolvency proceedings in Hong Kong, recognized in Singapore.
5. Formal Citations
- DMZ v DNA, Originating Application No 1222 of 2024, [2025] SGHC 31
6. Timeline
| Date | Event |
|---|---|
| Parties entered into four contracts for the sale of oil products. | |
| Parties entered into an agreement to extend the deadline for payment due under one of the Sale Contracts. | |
| Defendant filed a Notice of Arbitration with the SIAC. | |
| SIAC deemed the Arbitrations to have commenced. | |
| SIAC issued a letter stating that the Registrar had deemed the Arbitrations to have commenced on 3 July 2024. | |
| Claimant filed its response to the NOA, asserting that the defendant’s claims were time-barred. | |
| Defendant requested the Registrar to correct the commencement date of the Arbitrations to 24 June 2024. | |
| SIAC revised the commencement date to 24 June 2024. | |
| Claimant filed OA 1050 against the defendant and the Singapore International Arbitration Centre. | |
| Affidavit of [D] filed in HC/OA 1222/2024. | |
| Claimant’s Written Submissions filed in HC/OA 1222/2024. | |
| Hearing on 6 February 2025. | |
| Judgment issued. |
7. Legal Issues
- Permission to Commence Proceedings Against Insolvent Company
- Outcome: The court held that permission should not be granted as the intended proceedings were legally unsustainable.
- Category: Procedural
- Sub-Issues:
- Timing of application for permission
- Nature of the claim
- Merits of the claim
- Prejudice to creditors
- Review of Registrar's Decision on Commencement Date
- Outcome: The court held that it had no jurisdiction to review the Registrar's decision and that the Registrar was permitted to review his own decision.
- Category: Substantive
- Sub-Issues:
- Interpretation of SIAC Rules
- Conclusive and binding nature of Registrar's decisions
- Power of Registrar to review own decisions
8. Remedies Sought
- Declaratory Relief
- Setting Aside of Decision
9. Cause of Actions
- Breach of Contract
10. Practice Areas
- Arbitration
- Commercial Litigation
- Insolvency
11. Industries
- Oil and Gas
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Re Sapura Fabrication Sdn Bhd and another matter (GAS, non-party) | High Court | Yes | [2024] SGHC 241 | Singapore | Cited for the principle that upon recognition of a foreign insolvency proceeding, no action may be commenced or continued against the company without the court’s permission. |
| Wang Aifeng v Sunmax Global Capital Fund 1 Pte Ltd and another | High Court | Yes | [2023] 3 SLR 1604 | Singapore | Cited for the factors the court should take into account when determining whether permission should be granted to commence proceedings against a company subject to foreign insolvency proceedings. |
| Korea Asset Management Corp v Daewoo Singapore Pte Ltd (in liquidation) | High Court | Yes | [2004] 1 SLR(R) 671 | Singapore | Cited for the principle that the court should not grant permission to commence proceedings if the process will ultimately prove to be futile. |
| Sun Travels & Tours Pvt Ltd v Hilton International Manage (Maldives) Pvt Ltd | High Court | Yes | [2019] 1 SLR 732 | Singapore | Cited for the court's wide-ranging powers to grant declaratory relief in respect of a Singapore-seated arbitration. |
| COT v COU and others and other appeals | Court of Appeal | Yes | [2023] SGCA 31 | Singapore | Cited for the policy of minimal curial intervention in arbitral proceedings. |
| AT&T Corp and another v Saudi Cable Co | English Court of Appeal | No | [2000] 2 All ER (Comm) 625 | England and Wales | Cited for the applicant's entitlement to seek a review of the decision of the International Chamber of Commerce Court to dismiss a challenge to an arbitrator’s appointment. |
| Lines International Holding (S) Pte Ltd v Singapore Tourist Promotion Board | High Court | No | [1997] 1 SLR(R) 52 | Singapore | Cited for the court declaring that the guidelines and the decision of the Port of Singapore Authority to deny the plaintiff’s vessel a berth were ultra vires. |
| Li See Kit Lawrence v Debate Association (Singapore) | High Court | No | [2023] SGHC 154 | Singapore | Cited for the plaintiff seeking a declaration that the provisions of the Debate Association’s contract with its members was such that it had no power to take any form of disciplinary action. |
| Rex International Holding Ltd and another v Gulf Hibiscus Ltd | Court of Appeal | Yes | [2019] 2 SLR 682 | Singapore | Cited for the observation that the grant of a stay on case management grounds is part of the court’s exercise of its inherent jurisdiction to manage its own internal processes and is administrative. |
| Sloane v Minister for Immigration, Local Government and Ethnic Affairs | Federal Court of Australia | Yes | [1992] 28 ALD 480 | Australia | Cited for the principle that a power to reconsider an administrative decision could be implied based on necessity. |
| Republic of India v Vedanta Resources plc | High Court | Yes | [2020] SGHC 208 | Singapore | Cited for the observations that a procedural order is not final and may be reconsidered and revised by a tribunal but cannot be nullified by a court. |
| Republic of India v Vedanta Resources plc | Court of Appeal | Yes | [2021] 2 SLR 354 | Singapore | Cited for affirming the observations made in Republic of India v Vedanta Resources plc [2020] SGHC 208. |
| D’Orta-Ekenaike v Victoria Legal Aid and another | High Court of Australia | Yes | [2005] 214 ALR 92 | Australia | Cited for the principle of finality, that controversies, once resolved, are not to be re-opened except in a few, narrowly defined, circumstances. |
| ST Group Co Ltd and others v Sanum Investments Ltd and another appeal | Court of Appeal | Yes | [2020] 1 SLR 1 | Singapore | Cited for the challenge brought where the Court of Appeal held that the award ought not to be recognised or enforced because the arbitral tribunal had wrongly determined the seat and the arbitration was therefore conducted in breach of the arbitration agreement. |
| BTN and another v BTP and another | High Court | Yes | [2021] 4 SLR 603 | Singapore | Cited for the principle that costs should be ordered on an indemnity basis where the action amounts to an abuse of process and where the action is clearly without basis. |
13. Applicable Rules
| Rule Name |
|---|
| Arbitration Rules of the Singapore International Arbitration Centre (6th Edition, 1 August 2016) |
| Rule 3.3 of the SIAC Rules |
| Rule 40.1 of the SIAC Rules |
| Rule 40.2 of the SIAC Rules |
| Rule 41.2 of the SIAC Rules |
| Article 29.1 of the London Court of International Arbitration Rules 1998 |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act (Cap 50, 2006 Rev Ed) | Singapore |
| International Arbitration Act 1994 (2020 Rev Ed) | Singapore |
| Supreme Court of Judicature Act 1969 (2020 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Arbitration
- SIAC Rules
- Commencement Date
- Insolvency Proceedings
- Permission to Commence Proceedings
- Registrar's Decision
- Ultra Vires
- Abuse of Process
- Functus Officio
15.2 Keywords
- Arbitration
- SIAC
- Insolvency
- Singapore
- Registrar
- Commencement Date
16. Subjects
- Arbitration
- Civil Procedure
- Insolvency
17. Areas of Law
- Arbitration Law
- Insolvency Law
- Civil Procedure